« Back to News

HR 2396 The Full Utilization of the Harbor Maintenance Trust Fund Act Introduced In Washington DC

Photo for HR 2396 The Full Utilization of the Harbor Maintenance Trust Fund Act Introduced In Washington DC

4/30/2019

In Washington DC today, H.R. 2396 was introduced. The Full Utilization of the Harbor Maintenance Trust Fund Act, would unlock billions in already collected fees to maintain our nation’s Federal ports and harbors. 

For Immediate Release:  April 30, 2019

Contact:

Bayley Sandy (DeFazio), 202-225-4472

Justin Harclerode (Graves), 202-225-9446

 

Chairs DeFazio, Napolitano, Ranking Members Graves, Westerman, Rep. Kelly Introduce Bipartisan Legislation to Invest in Nation’s Ports and Harbors

 

Washington, D.C. – Today, Chair of the House Committee on Transportation and Infrastructure Peter DeFazio (D-OR), Committee Ranking Member Sam Graves (R-MO), Chair of the Subcommittee on Water Resources and Environment Grace F. Napolitano (D-CA), Subcommittee Ranking Member Bruce Westerman (R-AR), and Congressman Mike Kelly (R-PA) introduced H.R. 2396 the Full Utilization of the Harbor Maintenance Trust Fund Act, which would unlock billions in already collected fees to maintain our nation’s Federal ports and harbors.

Currently, the Harbor Maintenance Trust Fund (Trust Fund) collects more revenue from shippers than Congress has appropriated to the U.S. Army Corps (Corps) of Engineers to maintain our harbors. Approximately $9.3 billion in already collected revenue sits idle in the U.S. Treasury, not being used for its intended purpose of investing in our Nation’s ports and harbors. At the same time, some ports and harbors of all sizes struggle to remain competitive in the global shipment of goods and services or remain open to meet the needs of the communities that depend on a vibrant maritime and commercial fishing industry. While shippers continue to pay into the Trust Fund for Congressionally approved maintenance activities, the Federal Government has not carried out many of them.

 

This bipartisan bill makes it easier for Congress to appropriate any funds collected in the Trust Fund for authorized harbor maintenance needs, including the existing $9.3 billion balance in the Trust Fund.  The legislation enables the expenditure of approximately $34 billion over the next decade, which will allow the U.S. Army Corps of Engineers (Corps) to dredge all Federal harbors to their constructed widths and depths.

 

“As someone who represents a coastal district, I’ve heard from countless fishermen, ship, tug and barge operators about the critical need for safe and well-maintained ports and harbors that allow them to do their jobs and keep our economy moving. And I agree,” said Chair DeFazio. “The Federal government should be using the fees it collects at our ports for their intended purpose -- harbor maintenance.  By merely spending what is already being collected we can ensure our Nation’s ports and harbors remain open for business and can continue to sustain our local, regional, and national economies.

“Ultimately it is taxpayers and consumers who pay the cost of the HMT, as a pass through on the price of goods shipped through ports. However, when harbors are inefficiently dredged and maintained it leads to delays and increased prices. So, taxpayers are paying for a service that is not being done, and as a result, have to pay MORE for the goods they buy because of the lack of maintenance. It’s time Congress fully funds the operation and maintenance of our commercial harbors, including critical jetty and breakwater work. I urge my colleagues to support this critical, bipartisan legislation.”

“America’s ports and harbors are vital to the entire economy,” said Ranking Member Graves.  “Farmers, manufacturers, and businesses across the country rely on ports for trade, and the products we all buy at the store on a daily basis have often traveled by water at some point to get there.  The agriculture economy in my home state of Missouri relies on our Nation’s port infrastructure to send our products all over the world.  When any portion of our national infrastructure system doesn’t function properly that raises the costs of goods for everyone.  Congress should ensure that the funds collected to improve the efficiency of our ports are invested for their intended purpose.”

“It is wrong that for many years the Harbor Maintenance Trust Fund has been raided for non-harbor purposes,” Chair Napolitano said. “This bill is the first step this Congress will take in ensuring that the shippers who pay the Harbor Maintenance Tax are receiving a benefit from their user fee.”

“Proper funding is critical for harbors and ports to remain functional and competitive in the marketplace,” said Ranking Member Westerman.  “As ranking member of the Water Resources and Environment Subcommittee, it’s my responsibility to ensure the Army Corps uses the Harbor Maintenance Trust Fund for its proper purpose: fully funding ports and harbors to maintain both private and commercial industries. I hope this bipartisan legislation streamlines the Trust Fund appropriations process and paves the way for future investments in maritime maintenance.”

“Our nation’s ports and harbors, like the Port of Erie, are supposed to receive funding for dredging and other maintenance from the Harbor Maintenance Trust Fund.  Unfortunately, a significant portion of the revenue dedicated in the fund is not being used for that purpose,” said Rep. Kelly.  “This has resulted in the deterioration of ports across our nation, from the Great Lakes to the Gulf Coast. Erie and our nation as a whole have felt the negative impact of neglecting our ports. I am a proud sponsor of this bill, which will ensure that America’s ports and harbors are once again fully maintained for both commercial and recreational activities. American businesses need us to properly maintain our ports so they can stay competitive on the global stage and create more jobs for American workers. Let’s meet the needs of the 21st century economy by passing this legislation.”

To learn more about the legislation, click here.

Click here to hear directly from an Oregon fisherman on why this bipartisan legislation is critical.

BACKGROUND

In 1986, Congress enacted the Harbor Maintenance Tax (HMT) to recover the operation and maintenance dredging costs for commercial ports from maritime shippers. The HMT is directly levied on importers and domestic shippers using coastal or inland ports as a 0.125 percent ad valorem tax on the value of imported cargo (e.g., $1.25 per $1,000 value)[1] and is typically passed along to U.S. taxpayers on the purchase of imported goods or services. These revenues are deposited into the Harbor Maintenance Trust Fund within the U.S. Treasury from which Congress currently appropriates funds to the Corps for harbor maintenance dredging. 

According to the Congressional Budget Office (CBO), the Trust Fund will collect an additional $24.5 billion in new revenues (including interest) over the next decade—on top of the estimated $9.3 billion in previously collected but unspent revenues. Yet, according to CBO, Federal appropriations from the Trust Fund are only estimated to total $19.4 billion over the same decade, resulting in the Trust Fund balance reaching $14.4 billion in fiscal year 2029.

H.R. 2396, the Full Utilization of the Harbor Maintenance Trust Fund Act bill text can be found click here.

[1] The Harbor Maintenance Tax initially applied to both imported and exported goods; however, in 1998, the U.S. Supreme Court unanimously held that imposition of the tax on exported goods was a violation of the U.S. Constitution.